What is the R&D Tax Credit?
The R&D tax credit is a valuable tax-based incentive that is designed to encourage investment in R&D by companies in Ireland. The credit operates by giving you up to 25 percent of your R&D expenditure (both revenue and capital) in a tax credit or in cash (subject to certain conditions being met). The 25 percent credit is available in addition to the 12.5 percent corporation tax deduction at the standard rate.
The relief is generally available for R&D activities carried out in a wide variety of science and technology areas such as software development, engineering, food and beverage production, medical devices, pharmaceuticals, financial services, agriculture and horticulture.
How KPMG can help
KPMG’s R&D Incentives Practice was established in 2004, when the R&D tax credit was first introduced. We are Ireland’s largest, longest-established and most experienced specialist R&D tax credit practice. Our dedicated multidisciplinary team, comprising tax, finance, science and engineering professionals, has the expertise required to help ensure our clients claim their proper entitlement and submit robust claims to Revenue.
Our SME and large company teams have filed R&D tax credit claims for businesses of every size and scale and in all industry sectors. We engage regularly with all relevant stakeholders, including taxpayers and Government, and we have significant experience of Revenue’s approach to auditing R&D tax credit claims in Ireland.
Our services
R&D Tax Credit claim service
A claim for an R&D tax credit involves identifying and documenting qualifying R&D activities and associated qualifying expenditure in a manner that meets the strict requirements of the legislation and Revenue Guidance.
Our market leading R&D Tax Credit practice has been at the forefront of this area since the inception of the R&D tax credit in 2004. Our team has the tax, financial, and scientific technical skills to assist companies—regardless of size or sector—in preparing their claims through tried and tested methodologies and processes. We aim to ensure that your claim is complete, correct and will withstand a Revenue audit.
Stages involved in preparing an R&D tax credit claim
- Feasibility study
- Detailed preparation of claim
- Submit R&D tax credit claim to Revenue
- Audit preparation/support
Revenue audit support
In our experience, Revenue is auditing a high percentage of R&D tax credit claims and is taking an increasingly hard line with respect to issues arising from audits of claims. As a result, we prepare all claims on the premise that they should be expected to withstand a rigorous Revenue audit.
KPMG provides wide-ranging audit support for clients whose claims we have prepared and for companies who have claimed the R&D tax credit without our initial assistance. We have successfully managed a very large number of Revenue audits (with respect to all aspects of the audit: scientific technical, financial and tax technical) and have an excellent understanding of Revenue's processes in this area.
Documentation: K-Doc & K-Soft
When claiming the R&D tax credit, it is vital that companies ensure they can satisfy two essential tests, the accounting test and the science test, maintaining appropriate documentation to support both. However, as this is not always straightforward, KPMG has produced K-Doc, a tool designed to record R&D activities as they happen.
Based on a comprehensive review of current Irish and international legislation and guidance, undertaken by KPMG’s engineers and tax professionals, K-Doc and K-Soft enable companies to contemporaneously document R&D activities while ensuring the information captured satisfies the requirements set out in Irish legislation and Revenue guidelines.
The K-Doc suite addresses three key elements of R&D activities:
- planning;
- monitoring progress; and
- tracking the resources utilised during R&D activities.
It can significantly reduce the time and effort required to prepare a claim, while helping companies satisfy the documentation requirements set out by Revenue. K-Doc is a bespoke system tailored for each client; please contact us for further information.
Revenue audit support
In our experience, Revenue is auditing a high percentage of R&D tax credit claims and is taking an increasingly hard line with respect to issues arising from audits of claims. As a result, we prepare all claims on the premise that they should be expected to withstand a rigorous Revenue audit.
KPMG provides wide-ranging audit support for clients whose claims we have prepared and for companies who have claimed the R&D tax credit without our initial assistance. We have successfully managed a very large number of Revenue audits (with respect to all aspects of the audit: scientific technical, financial and tax technical) and have an excellent understanding of Revenue's processes in this area.
Do you have an R&D-related query?
Contact us. If you would like to request an R&D tax credits brochure, require information on how we can assist your company, or would like us to call you directly to discuss your particular circumstances, please email us at info@kpmg.ie.
We will endeavour to respond to your initial query within two working days.
More in R&D
About us
An eligible claim requires a well-structured, detailed, and pragmatic review of all activities and costs. KPMG’s R&D Incentives practice is a multidisciplinary practice comprising highly trained tax and finance professionals and chartered engineers working solely on R&D tax credit claims – this is all that we do!
We are Ireland’s largest, longest-established and most-experienced R&D Tax Credit practice, and are the only partner-led practice in Ireland. Our professionals consistently deliver high quality work to our clients, as demonstrated by our 2013 client satisfaction survey which found that 97% of our clients would recommend our practice to others.
Our practice
- KPMG’s R&D Incentives practice was founded when the credit was introduced in 2004; we were the first Big 4 firm to establish a dedicated R&D tax credit practice.
- We have dedicated SME and large company teams within the practice to help ensure our service is tailored to our clients’ needs.
- We are a founding member of KPMG’s global R&D Incentives practice, an international network of specialist R&D practices with over 300 professionals working full-time on R&D tax incentives claims; we also lead the Europe, Middle East and Africa R&D Incentives Practice.
Our expertise
- We make sure all our claims are Revenue audit-ready, working with clients to take appropriate tax and technological positions that satisfy Revenue’s guidelines.
- We are the only Big 4 firm in Ireland to have a truly integrated team of full-time tax professionals and full-time engineers, of any material size, working solely on R&D tax credit claims.
- Internationally, our scientific/engineering professionals have 18 PhDs, 17 Master’s Degrees, and 64 Bachelor’s Degrees in fields of science, engineering and technology.
- Our Capital Allowances/Tax Depreciation team (consisting of in-house chartered surveyors and chartered accountants) can help ensure our clients optimise not only their capital allowances and scientific research allowances, but also the plant, machinery and buildings expenditure that forms part of their R&D tax credit claims.
Our thought leadership
- KPMG’s R&D Incentives practice authored Ireland’s only specialist book on this subject, “The Research and Development Tax Credit – the Professionals’ Guide”, published by the Irish Tax Institute.
- We take an active role in the ongoing development of the R&D tax credit regime, frequently engaging with key stakeholders, including government and the private sector, to share views on current R&D tax issues.
- Our annual survey, “KPMG’s Innovation Monitor”, provides key decision-makers and stakeholders with unique insights into the R&D tax credit regime and the overall innovation environment in Ireland.
- We work with Ireland’s leading industry associations and innovation centres, and we support Ireland’s innovative sectors by way of event sponsorships, information seminars, and the regular provision of “health checks” and assessments of potential eligibility.
